China in Latin America

   The U.S.-China Economic & Security Review Commission’s 2011 report

notes that since 2004, Hu returned twice and also dispatched high level officials.  Venezuela, Mexico, Brazil, Peru and Cuba were particular targets. Latin American officials have reciprocated the visits.  The end result was a deep immersion of the Beijing government into regional affairs.  121 bilateral agreements and cooperation initiatives have been signed since 2000, concentrating in cultural, economics and trade, investment protection, public administration/consular affairs, science and technology, tourism, and military affairs.

  Participation in regional organizations has become extensive.  Beijing joined the Organization of American States as a permanent observer. It also joined the

Inter-American Development Bank with a donation of $350 million. It expanded diplomatic ties with the Group of Rio, the Andean Community, and the Caribbean Community groups. China has also been particularly encouraging in the development of regional organizations that exclude the United States. As reported on Beijing’S official web site, President Hu Jintao sent an enthusiastic congratulatory message to Venezuela’s Hugo Chavez and Chilean President Sebastian Pinera past December  on the founding of the “Community of Latin American and Caribbean States” (CELAC), a grouping that includes every nation in the western hemisphere except the United States and Canada.

                                  MILITARY MATTERS

  China’s official “Policy Paper on Latin America and the Caribbean” states:

“Military Exchanges and Cooperation.     The Chinese side will actively carry out military exchanges and defense dialogue and cooperation with Latin American and Caribbean countries.  Mutual visits by defense and military officials of the two sides as well as personnel exchanges will be enhanced.  Professional exchanges in military training, personnel training and peacekeeping will be deepened.  Practical cooperation in the non-traditional security field will be expanded.  The Chinese side will, as its ability permits, continue to provide assistance for the development of the army in Latin American and Caribbean countries.”

  Much of Beijing’s investment has been in strategic infrastructure, including port facilities on both the East and West sides of the Panama Canal, and, as Dr. Evan Ellis notes in Chinese Engagement with Nations of the Caribbean, the massive deepwater port and airport facility in Freeport, The Bahamas, just 65 miles from the USA, and a deep sea port in Suriname.

  Familiarizing its military with the region, China has deployed peacekeeping forces to Haiti, and a naval hospital ship to Cuba. Ellis notes that “The PRC also conducts significant interactions with the militaries of virtually all of the Caribbean nations with which it has diplomatic relations.  A series of senior level Caribbean military leaders have visited China in the past two years…At a lower level, people-to-people military interactions have included inviting uniformed Caribbean military personnel and defense civilians for professional education trips to the PRC…The PLA donated $3.5 million in non-lethal military equipment to the Jamaica defense Force in 2010….The PLA is also reported to have personnel at Soviet-era intelligence collection facilities in Bejucal, Lourdes, and Santiago de Cuba…”

  The U.S.-China Economic & Security Review Commission reports that Venezuela, Chile, Bolivia and Cuba now maintain strong ties to the Chinese military “through a high number of official visits, military officer exchanges, port calls, and limited arms sales.”  Venezuela, Bolivia and Ecuador have begun to buy Chinese arms and military equipment, including radar and aircraft.  Bolivia has signed a military cooperation agreement with China.

  Much of this is consistent with China’s long-range military strategy.  As noted in the Department of Defense’s hrecently released Annual Report to Congress on military & security developments involving the People’s Republic of China 2012, “China’s military modernization is…focusing on investments in military capabilities that would enable China’s armed forces to conduct a wide range of missions, including those farther from China…underscoring the extent to which China’s leader are increasingly looking to the PLA to perform missions that go beyond China’s immediate territorial concerns…”

 Cynthia Watson’s study Of China’s arms sale to the region  www.jamestown.org notes that the introduction of Chinese armaments allows Latin American governments to distance themselves from Washington. She notes that although Latin American nations have relatively limited resources to spend on weaponry, “Beijing’s ability to sell a small number of arms to the region is leading to an enhanced presence there…Beijing’s military to military ties are growing with the states of South America across the board:  military missions, educational exchanges and arms sales.  This activity is part of Beijing’s overall advancement of a foreign policy agenda aimed at raising China’s role as a great power.”

  Dr. Ellis notes that China has also insinuated itself in strategic areas such as space and telecommunications.  He concludes that “The PRC presence in the Caribbean has the potential to take on a much more menacing character should Sino-US relations degenerate into a hostile geopolitical competition.” He emphasizes the potential danger of “the presence of substantial Chinese naval facilities and telecommunications infrastructure (albeit commercial), and thousands of Chinese personnel, many less than 100 nautical miles from US shores…” Thanks to low or no interest loans by the Chinese government, telecommunications companies Huawei and ZTE have captured lucrative contracts.

  According to another report by Ellis, Brazil is the most important partner for China in space technology, and the South American nation is clearly eager to expand that relationship.  Peru, Venezuela, Bolivia, and Mexico may well fall into Beijing’s space technology orbit.  The presence of advanced technology and the Chinese professionals who operate it, so close to the American homeland, should give Washington pause.

  The U.S.-China Economic & Security Review Commission’s 2011 report  stated that “Resource acquisition remains a cornerstone of Chinese trade and investment in the region.” Other objectives included wrenching regional nations away from supporting Taiwan and interacting with local military organizations.

“In the past ten years, trade between China and Latin America has skyrocketed due to China’s enormous demand for new sources of natural resources and untapped markets for Chinese companies and brands.  From 200 to 2009, annual trade between China and Latin American countries grew more than 1,200% from $10 billion to $130 billion based on United Nations statistics.”  Due this extraordinary growth, Beijing has designated Brazil, Mexico, Argentina and Venezuela as “strategic partners”.  China has become Latin America’s third largest trading partner.

  Some observers, like Kevin Gallagher, co-author of “The Drago in the Room: China and the future of Latin American industrialization” believe that China has supplanted Latin America’s role as a manufacturer of low-cost goods and forced it to depend more heavily on the sale of raw materials, a move which may eventually prove detrimental to the region’s economic future.  The view is shared by Market Watch’s Tom Thompson   He notes the effect may be harmful not only to the enterprises but also to the people of the region.  “By design,” he notes, China will not contribute to knowledge-based, value-added innovation and production in Latin America.  Chineses investors are perfectly happy with low levels of education among workers in raw materials industries.  Liberalization of labor codes will lag.  And investment in extractive industry research and development will be kept in China.”

  Removing recognition from Taiwan has been a key object of Beijing’s expansion into Latin America.  The U.S.-China Economic…notes that that the PRC has followed the “checkbook diplomacy” approach once employed by free China.  The practice has been openly mercenary.  Dominica abandoned Taiwan in favor of Beijing in 2004 after receiving a $112 million dollar pledge from the mainland.  Costa Rica followed suit in 2007 in return for a $300 million government bond purchase and infrastructure projects, a $10 million cash donation $83 million for a national soccer stadium, and a $1 billion joint petroleum venture.  Other nations have or will be following suit.

  The Chinese emphasis was clear.  Six of the 23 nations that still recognize Taiwain, the Republic of China, are in this part of the world.

  Hsaio, discussing Sino-Caribbean relations,  notes that “The desire to strip Taiwan of its remaining allies, as a step toward reincorporating it under the domain of mainland china, has given the Caribbean a level of political salience in Beijing that it would otherwise lack.  Yet, the true shape of China’;s relations with the Caribbean will be determined by broader global forces and the dexterity with which Chinese policymakers and their Caribbean counterparts are able to forge mutually advantageous ties.  It is clear that China is mapping out a long-term vision for engaging with the Caribbean, but it is to early to tell whether this vulnerable region will sink or swim as a result.”

  Beijing’s determination has borne fruit, sometimes spectacularly so.  In 2007, Mexico conceded to Beijing’s demands  to force a plane with Taiwanese president Chen Shui-bian to leave its airspace.  The president was merely flying over Mexico while returning from an inauguration of Nicaragua’s Daniel Ortega.

 As a Communist and totalitarian nation, China naturally feels more comfortable with similar governments.  It is not surprising then that relationships with Cuba and Venezuela are the most intimate.  In July, Chinese Premier Wen Jiabao met with Cuban president Raul Castro, and referred to the island nation as China’s most important partner in the region.  He also pledged to bring relations between the two nations to a “new high.”

  Relations with Venezuela’s Hugo Chavez are also valued greatly. The two nations have a memorabdum of understanding dating back to 2001 that aims to cement the relationship. China is Caracas’ second-largest consumer of oil, after the US.